As Asian markets reopened Monday after last week's global stock-market rout, share prices fell sharply in Hong Kong and Singapore. But they rose in Japan, despite more bad news about Russia's economic and political stability.
After only seven minutes of trading in Hong Kong, the Hang Seng Index was down 5.7 percent. By closing, it had fallen even further, shedding 7.1 percent, or 554.70 points, to 7,275.04.
In Singapore, where the benchmark index had crashed through the crucial 900-point level for the first time in 10 years Friday, shares fell 28.83 points, or 3.25 percent, to a new low of 856.43.
However, on the Tokyo Stock Exchange, where the benchmark 225-issue Nikkei Stock Average had sunk to a 12-year low Friday, stock prices rose moderately, gaining 192.26 points, or 1.38 percent, to close the day at 14,107.89.
"Given the big falls we had last week, world markets may be taking a breather. But generally the fundamentals in Japan and Asia as a whole remain bleak," Peter Morgan, a senior economist at HSBC Securities Japan, Ltd., said in an interview.
Elsewhere in Asia, the key stock index in Taiwan fell 2.8 percent to finish at a 22-month low, and stocks ended up rising 1.8 percent in South Korea, falling 1.4 percent in Australia, and remaining nearly unchanged in the Philippines.
Markets were closed in London, the largest exchange in Europe, for a bank holiday, while in Germany, stock prices were slightly higher in mid-morning trading.
Across Asia, Europe, and the Americas, many stock markets fell by big percentages last week. That left some people wondering if the year-old Asian financial crisis, and the recessions it has caused in regional powerhouses such as Japan and Hong Kong, could spread to the West and sour its economies.
On Sunday, Japan's chief economic planner, Taichi Sakaiya, proposed an emergency summit of major industrialized countries to address the chaos roiling world financial markets.
In the United States, the Dow Jones Industrial average dropped 357 points Thursday and 114.31 points Friday, leaving it at 8,051.68. That shrank 1998's gain to 1.8 percent. At July's peak, the Dow had been up 18.1 percent.
To make matters worse, the ruble recently collapsed in Russia, setting off political and economic instability there.
On Saturday, Russia's new acting prime minister, Viktor Chernomyrdin, began negotiating a power-sharing agreement with the Russian parliament and reassured markets around the world that the country would not return to a Soviet-style economy.
But on Sunday, hours after the interim government and parliamentary leaders agreed to an 18-month truce that would leave Boris Yeltsin in control and give the administration time to try to end the crisis, the agreement collapsed after the communists rejected it.
In Hong Kong Monday, the Hang Seng Index seemed to fall sharply because the government has reduced its role in tradin.
For two weeks, Hong Kong's government had been buying stocks to drive the Hang Seng Index to a level at which speculators who bet on stock prices falling would lose money.
On Friday, that aggressive government-buying pushed trading volume to a record $10.1 billion. Traders estimated the government spent $9.1 billion.
Speculators Monday suddenly found it more expensive to bet against Hong Kong markets because of new measures taken by the Futures Exchange over the weekend to curb manipulation.
On Saturday, the futures exchange announced it would require market players to come up with more cash when buying or selling more than 10,000 futures contracts. In addition, it is now requiring members to report and identify anyone holding 250 contracts or more. Previously, the reporting level had been 500 contracts, and market players could remain anonymous.
Even though stock prices seemed far more stable in Tokyo Monday, signs of gloominess and fear about the world's economic future also remained high in some areas.
"I'm worried," said Kazuomi Kobayashi, a 52-year-old Tokyo barber who dabbles in stocks.
Standing in front of a large electronic board in downtown Tokyo showing the latest Nikkei numbers, he said: "I've lost so much. When I buy, it goes down. When I buy again, it goes down again."
Even in Singapore, where newspapers often work with the government to keep people calm, signs of panic prevailed.
"World markets sent reeling: World faces global meltdown as its leaders fail to find solutions to Russia's worsening crisis," said the front-page headline in Saturday's The Straits Times.
"Fear of complete meltdown rules markets," said a headline in The Business Times Monday.
Written by Thomas Wagner